The top challenges business owners face will not be news to you… but how to overcome them very well may be.
If you’re experiencing a fear you won’t make payroll, 60-hour weeks with years of no vacation, and employees who don’t want to work, read on.
Our team of 5 business coaches identified the 4 top challenges business owners face and how you can overcome each one:
From manufacturers and law firms to veterinary practices and construction companies, cash flow problems don’t discriminate by industry. It’s estimated that nearly 75 percent of small business owners have fears about not being able to pay employees.
To improve cash flow, don’t make the mistake of looking first at decreasing expenses. First, focus on increasing revenue by creating a strong sales strategy. Then focus on decreasing expenses.
- Focus on the profitability of the work you do. Create workflow systems to reduce the cost of delivering your service. A heating/cooling company has a service guy who stops to get coffee on the way to the 1st job of the day. He arrives and makes a phone call to his daughter before knocking on the door. He chats with the customer an extra 10 minutes, brings one tool at a time to the work site, chats with the customer, makes another phone call, then leaves. He stops to pick up a few parts at the supply house and talks to the clerk about football, goes to the 2nd job, realizes he needs another part, leaves mid-way through the job to get the part, returns to the job, chats with the customer…all these little things add up and soon the delivery of the service has become expensive, and your profitability has evaporated.
- Adjust work schedules to avoid overtime. OT is a huge expense.
- Whether you sell water softeners or computers to legal services, require the customer to pay 50% of the quote up front. Use the deposit to pay for your upfront expenses. Then you’ve got cash to cover your costs without carrying them on your books for 30, 60, 90 days, or more.
- Minimize the money owed to you. First, invoice immediately. Next, change your terms from 30 days to “due upon receipt,” 7 days, or 14 at the most. Provide financing and/or take all credit cards. The money is always better in YOUR account.
Lack of Time/Balance –
The number of hours clocked by business owners typically exceeds 60 per week. According to research, 9 of 10 small business owners say that they’re still involved in the day-to-day activities of their business as opposed to truly focusing on the company’s future. What can you do to get some time back?
- This may sound like a broken record but it’s THE main way to overcome one of the top challenges business owners face – DELEGATE. Delegation is an art and a science so give some dedicated time to learning how to do it and then practicing it. Identify tasks you can delegate and then identify who to delegate to. It won’t “feel” right at first, but we promise it will pay dividends in terms of your time.
- Outsource effectively. There are many B2B service providers who cater to small businesses that aren’t big enough to have dedicated staff for things like HR, Accounting, Administrative support, and even Sales.
- Be religiously disciplined about checking email and other tech notifications only at designated times. Be careful not to use these as a “break” or an excuse to not focus on long-term things like profit and the company’s future.
Burden of Leadership –
While your company is small, it makes sense to do the business management yourself but as your business grows, a 1-person management team can find you stretched thinner and thinner. Constantly fielding questions, reviewing work, and putting out fires can cause you to be a bottleneck. Eventually, you realize you can’t continue to oversee all the business management needs—operations, sales, accounting, fulfillment, marketing… and hope to also grow your business.
- Build a leadership team and create a management structure. You can grow employees to be responsible for the day-to-day while you focus on the strategic direction and future. Your job then becomes to lead, develop, and coach a team of managers that is collaborative, results-oriented, and profit-focused.
People Performance –
Talk about one of the top challenges small business owners face! There’s no surefire way to prepare for employee performance and behavioral issues, but understanding how to hire great people can lessen the risk of hiring employees who don’t follow instructions, lack initiative, and lack genuine care for your customers. Three ways to avoid those headaches:
- Hire for values and train for skills.
- Go for the best and don’t settle for a warm body… because your people are your company’s main asset.
- Use behavioral-based questions during all interviews.
If you’re interested in learning how you can overcome your own unique challenges and plan for 2024, create your company’s Single Sheet Business Plan. It contains your long-term goals, mid-term goals, and short-term quarter-by-quarter goals to ensure you overcome YOUR top challenges business owners face. Best of all, it’s a plan that is literally on 1 single sheet of paper. Click here to download your copy and get started.